NDIS funds to be 'repurposed' for drought relief under Morrison plan

Disability advocates have slammed Prime Minister Scott Morrison's decision to "repurpose" $3.9 billion originally set aside for the NDIS to pay for drought relief, but the plan has been cautiously welcomed by farmers.

Mr Morrison unveiled his $5 billion Drought Future Fund at a summit attended by farmers, economists, industry bodies and state and federal ministers in Canberra on Friday, promising measures to drought-proof the nation's agriculture sector.

The first $3.9 billion of the scheme, which would operate similarly to the Medical Future Fund, is to be paid for out of a pool of money originally intended for the National Disability Insurance Scheme.

Physical Disability Council of NSW chief executive Serena Ovens likened the move to "stealing from Peter to pay Paul", saying the funds should instead be used to ensure the NDIS would be sustainable in the long term and that Australians with disability were given "what is required to have a normal, reasonable life".

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Ms Ovens said while helping farmers was a worthy aim, it should not be done "at the cost of an equally important scheme for some very vulnerable people".

And she remained unconvinced by the government's insistence that the scheme remained fully funded given it was forced to scrap a Medicare levy increase intended to raise $8 billion for the NDIS over four years, after failing to secure support in the Senate.

"The government is saying they've got enough funds to manage it, which is all well and good now - if you have funds, great - but, in two years' time, the government might be not in the same place and therefore not have the funds put aside," she said.

Mr Morrison said the government would draw down $100 million a year from 2020 from the Drought Future Fund for "projects, research and infrastructure to support long-term sustainability" of the agriculture sector, including community services, advice and technology adoption assistance.

He also announced $116.5 million worth of new funding to help farmers through existing portfolios, including $21 million for local shires and councils, $30 million for drought assistance charities, $15.5 million for mental health service in drought-affected areas.

And a $50 million Emergency Water Infrastructure Rebate Scheme will hand drought-affected farmers back up to 25 per cent of the cost of installing new equipment to provide water for livestock.

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Finance Minister Mathias Cormann said the NDIS "is now fully funded from consolidated revenue on the back of a stronger economy and, because of our successful budget repair efforts, a stronger and improving budget position".

"Just for the last financial year alone, as reported on 25 September 2018, our budget bottom line improved by $19.3 billion in one single year compared to budget forecast," Mr Cormann said.

The government had previously announced plans to transfer the $3.9 billion in its Building Australia Fund to the NDIS.

"Our sound economic and fiscal management has enabled us to fully fund the NDIS from consolidated revenue without increasing the Medicare Levy as originally proposed and without transferring the Building Australia Funds into the NDIS Savings Special Account," Mr Cormann said.

Addressing the summit on Friday, agricultural economist Steve Hatfield-Dodds warned of the need to ensure that assistance to farmers did not hamper productivity gains in the sector, which had tempered the impact of the drought.

Dr Hatfield-Dodds, the director of the Australian Bureau of Agricultural and Resource Economics and Sciences, said it was important to acknowledge "the tensions between assisting farmers in times of drought, and promoting the best long-term industry performance" when formulating policy.

"Supporting drought affected farmers has the potential - depending on how it's done - to slow the process of farm consolidation and growth in farm scale, which accounts for as much as one-half of all productivity gains in broad-acre agriculture over the last three decades," he said, noting the work done by scientists to boost agricultural production.

Coordinator-General for Drought Major General Stephen Day, Minister for Regional Services, Sport, Local Government and Decentralisation Bridget McKenzie, Deputy Prime Minister Michael McCormack, Prime Minister Scott Morrison, NFF President Fiona Simson and Minister for Agriculture and Water Resources David Littleproud. Credit:Alex Ellinghausen

"This productivity growth ... is essential to maintaining the resilience and international competitiveness of Australian agriculture."

Pastoralists and Graziers Association of Western Australia president Tony Seabrook said the Future Fund must not be used to prop up farming businesses that were unsustainable.

"We need as an industry to be resilient. To go back to government every time there's a tough time, other businesses don't have that privilege," Mr Seabrook said.

"I totally support household support, mentoring, perhaps a grant to exit. But you can't just think that you can keep everybody there. It doesn't work that way."

He said the existing farm management deposits scheme - which allows primary producers to put away money in good times and draw it down, tax free, in bad - should be extended to allow farmers to transfer the money into superannuation if it was not needed.

Despite being special envoy for drought assistance, former Nationals leader Barnaby Joyce was absent from a key press conference on Friday afternoon when Mr Morrison handed his colleague David Littleproud the additional ministerial portfolio of Drought Preparation and Response.

Mr Morrison was flanked by Nationals leader and deputy prime minister Michael McCormack, Nationals senator Bridget McKenzie, Major General Stephen Day and National Farmers Federation president Fiona Simson.

Mr Joyce, who had addressed the summit earlier in the day, told Fairfax Media he had "no problem" with Mr Littleproud's appointment.

Opposition agriculture spokesman Joel Fitzgibbon dismissed the government's drought summit as a "Talk fest" and the Future Fund as "just an accounting trick, designed to generate a big dollar headline".

"Some $5 billion. It is fake money until it is allocated to a program," Mr Fitzgibbons said.